The dollar dipped and the euro firmed on Friday as the market looked past what was likely to be a French rejection of the EU constitution in this weekend's referendum.
The single European currency edged up to US$1.2580 at 9pm GMT from US$1.2506 late on Thursday in New York.
The dollar stood at ¥107.88, from ¥107.93 on Thursday.
The euro had fallen to US$1.2492 overnight, the lowest level since Oct. 19, on increasing expectations that France would vote against the EU constitution today despite a last-ditch bid by President Jacques Chirac to rally support. Most analysts think the impact of a French no vote has been largely priced in, making players reluctant to stick their necks out any further, especially ahead of the three-day weekend in the UK and US.
Greg Anderson, currency analyst at ABN-Amro, said traders had been selling euros for most of the past seven weeks in anticipation of a rejection by the French vote and that "today they're taking profits."
He said investors were squaring positions ahead of the holiday weekend in London and New York.
"If there's a `no' vote, the euro dollar will stay between US$1.25 and US$1.26," he said. "If it's a `yes,' the euro could bounce back to US$1.27."
He added that he expected any moves to be limited because "it's still the same economy."
Opinion polls continue to suggest that around 54 percent of the French plan to vote no despite Thursday's television plea by Chirac.
Michael Woolfolk at the Bank of New York warned that the euro could well see a bounce back when the dust settles on the French vote, citing the dollar's inability to keep rising despite strong US data.
"The failure of a strong durable goods, GDP and personal income and spending reports to prompt any convincing break of US$1.2500, let alone the strong technical support level at US$1.2460, suggests that the euro may be positioned for a sharp consolidation higher following the French referendum vote this weekend," he said.
David Watt, senior economist at BMO Nesbitt Burns, said he sees more trouble ahead for the greenback as the rally runs out of steam.
"US investors are developing an appetite for overseas investing, suggesting that portfolio flows will prove a challenge to a sustained dollar rally," he said.
US data on Friday failed to inspire markets.
Personal incomes in the US rose 0.7 in April, in line with market expectations, while personal spending rose 0.6 percent, slightly below predictions.
"This report indicates that the US consumer continues to spend money at a brisk pace, supporting above-trend economic growth amidst rising income and employment," Woolfolk said.
In late New York trade, the US dollar stood at 1.2303 Swiss francs from SF1.2355 Thursday.
The pound was being traded at US$1.8235 after US$1.8200 late on Thursday.
Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure yesterday after a report that Apple Inc is looking to shift some orders from the Taiwanese company to Intel Corp. TSMC shares fell NT$55, or 2.4 percent, to close at NT$2,235 on the local main board, Taiwan Stock Exchange data showed. Despite the losses, TSMC is expected to continue to benefit from sound fundamentals, as it maintains a lead over its peers in high-end process development, analysts said. “The selling was a knee-jerk reaction to an Intel-Apple report over the weekend,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to remain Apple Inc’s primary chip manufacturing partner despite reports that Apple could shift some orders to Intel Corp, industry experts said yesterday. The comments came after The Wall Street Journal reported on Friday that Apple and Intel had reached a preliminary agreement following more than a year of negotiations for Intel to manufacture some chips for Apple devices. Taiwan Institute of Economic Research (台灣經濟研究院) economist Arisa Liu (劉佩真) said TSMC’s advanced packaging technologies, including integrated fan-out and chip-on-wafer-on-substrate, remain critical to the performance of Apple’s A-series and M-series chips. She said Intel and Samsung
POWER BUILDUP: Powered by Nvidia’s B200 Blackwell chips, the data center would support MediaTek’s computing power demand and business growth, the company said Smartphone chip designer MediaTek Inc (聯發科) yesterday launched a new artificial intelligence (AI) data center with a maximum capacity of 45 megawatts to meet its rising demand for computing power required to develop new advanced chips for AI applications. The company has completed the first-phase computing power buildup at the data center in Miaoli County’s Tongluo Township (銅鑼), providing 15 megawatts of capacity to support its research and development (R&D) capabilities, despite an industrywide shortage of key components, MediaTek said. Supply constraints have plagued a wide range of key components, including memory chips, solid-state drives, power supply units and central
TRANSITION: With the closure, the company would reorganize its Taiwanese unit to a sales and service-focused model, Bridgestone said Bridgestone Corp yesterday announced it would cease manufacturing operations at its tire plant in Hsinchu County’s Hukou Township (湖口), affecting more than 500 workers. Bridgestone Taiwan Co (台灣普利司通) said in a statement that the decision was based on the Tokyo-based tire maker’s adjustments to its global operational strategy and long-term market development considerations. The Taiwanese unit would be reorganized as part of the closure, effective yesterday, and all related production activities would be concluded, the statement said. Under the plan, Bridgestone would continue to deepen its presence in the Taiwanese market, while transitioning to a sales and service-focused business model, it added. The Hsinchu
RSS